It is the latest in a string of high-level corruption scandals to hit the ruling Popular Party (PP) and has piled pressure on Prime Minister Mariano Rajoy a year ahead of a general election.
Police on Monday arrested dozens of people for questioning over alleged kickbacks linked to public work contracts worth roughly USD 315 million.
Rajoy apologised on Tuesday in parliament but insisted justice would run its course. In 2013 he had apologised for a separate scandal over alleged secret payments to PP members and resisted pressure to resign.
Judge Eloy Velasco at the National Court in Madrid today ordered two suspects to be remanded in custody after questioning them over alleged fraud and influence-peddling, a judicial source said.
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The judge set bail of 300,000 euros for a third suspect while three others already questioned have paid bail, including two PP mayors.
Overall 15 people have so far been placed under judicial investigation after closed hearings in the court, the source said.